We hear startup proposals from entrepreneurs – many of whom are Millenials and this is not a swipe at Millenials at all, not to worry – and oftimes their ideas include a social good component. We have nothing against social good – au contraire – and often, no matter what the full platform/pain-point solution, the entrepreneur tends to focus on the social good component. Often to the exclusion of all else, or they may bring it up five to ten minutes into the investor pitch.
Things To Remember:
- You’re there at the pitch to get money/funding from the investors
- The investors are about money, too – they have LPs to answer to
- No matter how worthy your social good angle, bottom line: consumers are selfish – what’s the value add to them, besides the fact that, say, you want to educate every single person in the world? Nice – how does your laundry detergent help me (and we mean the royal/inclusive ‘me’ here) to completely remove all stains (if that’s what you’re offering) at a price point that’s going to inspire me to give up my current laundry detergent. Nice that it’s also going to completely reverse the effects of water pollution and you also have a social good angle – you want to contribute 50% of the profits to help educate the world, but at, say, $200 for a box of detergent, no matter how good your overall intentions, that’s a non starter.
- Investors have the attention span of a gnat, with all due respect to our investor friends out there. It’s not that they’re necessarily ADHD: they’ve been there/done that/heard it all before/burned the tee shirt: they want to know about your product, not your conscience. Being able to pay back their LPs – with nice returns – that’s what helps them sleep at night. Too.
Get to the point, throw in the social good angle later, if you need to, or to roughly cite Jerry Maguire, it’s you lost me at ‘hello.’
Same with your customers.
Want to be the Next Twitter?
Twitter is losing shares – both market share and mindshare. As Bloomberg noted, Twitter Fails to Grow Its Audience, Again. Monthly active users in the U.S. fell, as did ad revenue. Company says it doesn’t expect sales growth to improve in 2H. According to the article, the latest numbers are “spooking investors looking for evidence that the company is on a sustainable long-term growth path. The shares tumbled the most in nine months, even as quarterly revenue topped analysts’ projections. A long-term turnaround depends on Twitter expanding its audience… Chief Financial Officer Anthony Noto said Twitter doesn’t know why U.S. monthly active users slipped.”
Twitter also has an agenda, and as Bloomberg points out, “Twitter’s business troubles contrast with its increased profile in the political world.” Twitter is known for censoring opinions and users with whom they do not agree, politically. Good to have a point of view, but business is business. Twitter seems more focused on ideology than business (How Twitter’s New Censorship Tools Are The Pandora’s Box Moving Us Towards The End Of Free Speech), so heads up, Anthony Noto and happy to explain it to you: Fine to take an ideological stand, but careful if and when you’re already on a slippery slope.
It’s Just Business
At the risk of sounding repetitive, you’re building a business and all businesses are customer-centric in some form: B2B or B2C, at the end of the day, it’s still customers who are paying the bills. Social responsibility is to make money, offer a good product at an affordable price, and pay your employees living wages (Facebook worker living in garage to Zuckerberg: challenges are right outside your door). Social good is nice to have, but it’s not you’re primary market – unless it’s your primary market. It’s not going to sell your soap, unless your differentiator is compelling and the price is consumer-friendly. You want to reach the largest possible market, even if do feel that you’re doing the greatest possible good. The latter might not be everyone’s driver. Your mission might be big. But not necessarily a big driver for investors and/or customers.
Don’t get caught up in the emotion. Remember two things: 1 It’s business, and 2 You’re bigger than that. Onward and forward.